Nope. It means no trace of them there, which is what that article says. They theorise they must have been diluted down to nothing, but the bottomline- contrary to your own assertions- is they disappeared from the Levant without ANY evidence of passing on anything genetically. Which is the opposite of interbreeding.

Even if they did interbreed- they are no relation to modern Palestinians anyway. The only Palestinian heritage that can date back that far is for those Palestininians who were previously Jews and converted throughout the centuries. So then it is a Jewish heritage.

But no, the Phillistines disappeared from the southern Levant, the only area they briefly occupied, without any evidence they contributed to the gene pool or anything else.

You are basically arguing the absence of something genetically is evidence of it. Science doesn't work that way. You could always try religion.